Keravnos: CoLA/minimum wage review to take fiscal discipline into account

Finance Minister Makis Keravnos said that any decisions on issues related to the Cost of Living Allowance (CoLA) and the national minimum salary will be made taking fiscal discipline into account, in order to keep the economy in its current good condition.

He was speaking after he convened his first Advisory Economic Committee meeting since taking office, which was joined by the Ministers of Energy, Commerce and Industry and Labour and Social Insurance, as well as the social partners (employers and trade unions).

During the meeting they discussed all issues related to the Cypriot economy, public finances and the state payroll, the labour market, inflation, the green and digital transition, tax reform, the minimum wage and CoLA.

Keravnos, who said these meetings will become more regular, stressed that the biggest problem now for the economy is the war that continues in Ukraine and the war in Israel and Gaza, which have multiple adverse consequences and add inflationary pressures, leading to rising prices and problems for the middle class.

"We are therefore dealing with this issue on a daily basis and we are adjusting our economic and social policies to alleviate any difficulties our households and small businesses face," he added.

Asked about the tax reform and whether he has received opinions from the social partners, he said that the reform process has begun after being assigned to the University of Cyprus.

Keravnos said that he agrees with the request that all social partners must be involved in the discussions from the initial stage, so that all points of view are heard.

In addition, he said that tax reform aims to modernise the tax framework, to encourage business and to ease the burden on individuals, adding that “we expect this tax reform to work as a mechanism for a fairer, equal distribution of income”.

Moreover, the Minister referred to the evaluation of the Cypriot economy and budget by the European Commission in the context of the European Semester. He noted that the Cypriot economy together with a group of member states was evaluated as one of the best countries in terms of its economy and the economy’s indicators.

Concluding, he said that he had received a phone call from the President of Eurogroup, who congratulated him on the state of the Cypriot economy and the economic policy the Ministry is implementing.

(Photo: PIO)